Bought new build, finished in summer 09, can we renegotiate as prices slide further ?

Amino

Hi

Myself and partner agreed to buy a Bryant home a couple of weeks ago, now the plot we agreed on wont be finished until next summer, so as prices continue to slide over the next 12 months, can we renegotiate the price even though the paid the reservation fee with the agreed sale price ?

eco's are

4 bedroom end of terrace house with a double car port a utility room, 3 reception rooms, 3 double bedrooms and a single bedroom

the property was listed at £330,000, we made an offer of £295,000 inclusive of them paying the stam duty @ 3% which after a long wait they agreed to.

This represents a reduction of just over 15%. I had a look on propertysnake to see what was happening in the area and other similar properties look like they have so far slid about 9% so I think we got a decent deal but I dont want to pay over the odds if they start accepting even lower offers...

Doozergirl

Once you've exchanged - which you will asked to do within 28 days, you can't renegotiate.

I would have negotiated that discount before the credit crunch, to be honest.

Might be a stupid thing to point out but I hope you've seen a built version of the house! You can get a bit of a shock when you see the actual size and aspect. Best discounts to be had will be on houses that are already built at the moment.

So many developments are being mothballed - is this a big development or small? I'd say summer of 2009 they are anticipating slow sales and are giving themselves time to drum up interest. Fingers crossed they don't drag the timeline out further if they don't get enough sales.

You will need quite a long reaching mortgage deal because you really don't want to be in the situation where the mortgage deal runs out and the house ends up downvalued.

I'm not saiyng don't buy at all but I really would look for bigger discounts because I think they are available look for something built so that you don't encounter mortgage or timeline issues down the line.

Premier_2

Until exchange, you can negotiate all you want.

However, look carefully at the terms and conditions associated with the reservation fee paid. Is it refundable? Under what conditions? Unless its fully refundable if for any reason the buyer pulls out, tread very carefully as any re-negotiation now may be taken as an indication you are not happy to proceed, meaning the property will immediately go back on the market and you may lose out on the reservation fee paid.

Doozergirl

Amino wrote: »

This represents a reduction of just over 15%. I had a look on propertysnake to see what was happening in the area and other similar properties look like they have so far slid about 9% so I think we got a decent deal but I dont want to pay over the odds if they start accepting even lower offers...

If others have dropped 9% then you're saving 6%, surely?

Incisor

Make sure you get some kind of guarantee about completion date, because if they decide not to finish building, you could be waiting for years.

Amino

we havent exchanged just yet, we are waiting to complete the sale of our current home which is SSTC, we were told there was another property of the same design which the buyers are yet to exchange about 11 months down the line as they were having trouble acquiring their mortgage, can I use this to our advantage just before we actually exchange ?

We have been in a built one yes as its their sales office now, and for us it will suit our needs for a long time to come I think so space wise its pretty good.

The development is fairly large in a rural setting, their are 3 developers spread in close proximity. (Bryant, Crudace, & Persimmons) which incidently we were told the other two developers are holding out on their prices and are not lowering for the forseeable future so they are losing on sales to Bryant.

Our plot is in a chain of 6 other houses and another two were reserved the other day so they expect that head office will tell them to start building our road next.

bristol_pilot

They might finish your house but leave the rest of the street unfinished, leaving your property blighted for years. I would pull out, although you may lose your reservation fee. Was it a lot?

Amino

The builder said if they get the go ahead they will have to build all 6 properties together so we may see some residual properties being finished when we move in. This would not bother me too much and my other half has been through this twice before as her parents bought new previously. The guaranteed completion date is Sept 09 but if they sell one more on our road that date will come significantly forward

The reservation fee was £1000. Ultimatley we wont pull out as the location is ideal for both of us as my other half works in Addenbrooks and I can get fast trains to the City. Im only concerned that the value of it now and next year may be something very different..so wanted to kkow if we could reneg

bristol_pilot

Well, do you expect the fall in value by next year to be more than £1000?

I would say that having paid £295k, you are too close for comfort to the stamp duty threshold of £250k - that is what the property could be worth by next year (i.e. another 15% fall). Take whatever the developer says will be built and when with a pinch of salt.

Amino

bristol_pilot wrote: »

Well, do you expect the fall in value by next year to be more than £1000?

I would say that having paid £295k, you are too close for comfort to the stamp duty threshold of £250k - that is what the property could be worth by next year (i.e. another 15% fall). Take whatever the developer says will be built and when with a pinch of salt.

possibly but I would hope not...in fact I just dont know what they will do to answer that one accuratley

What do you mean about being too close to the stamp duty threshold ? as the developer is paing our stamp duty (£8850)

We are fully prepared to take their dates with a pinch of salt as you say as its a messy situation all over the place now. To us that = being able to save additional money to furnish and develop the place when we move in. We will be staying with her parents until its built so we will hav very minimal outgoing.

bristol_pilot

What I mean by too close to the stamp duty threshold relates to the value that the house will have in a year's time to hypothetical prospective purchasers who may not wish to pay 3% stamp duty.

Your situation is very similar to mine in the last house bust ca. 1990 - developer went bust leaving half the estate unfinished for 6 years, luckily the other end of the estate to my place, but it was still a problem. Value fell 50% in 3 years.